Commission calls for more transparency

Governments must be more transparent and accountable for the costs their laws impose on business and the community, the Productivity Commission says.

The federal and state laws that have the biggest impact on the public are often among the least scrutinised in terms of the cost to implement them, it said in a report out today.

The commission investigated the quality of federal, state and territory governments’ efforts to take into account the red tape cost to the community. It found ministers often announced policies first, with the cost to the public an afterthought.

It said policy decisions could be markedly improved if ministers had to provide reasons to Parliament for failing to consider the red tape burden on business. They should also produce draft regulation impact statements for early consultation, and there should be more independent auditing of the true red tape burden of new laws.

The commission recommended governments publish all regulation impact statements, using a two-stage process so stakeholders can comment on them. It said there should be fewer opportunities for ministers to avoid red tape assessments, more effective targeting of red tape resources and more reviews of how regulations have worked in the community.

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“Whilst these processes are reasonably well designed and supported in all jurisdictions, there are some shortcomings and a significant gap between agreed and actual practice that must be addressed," commissioner Robert Fitzgerald said. One of the major concerns was the number of “highly significant" policies that were either made exempt from red tape considerations or not properly analysed.

The minerals resource rent tax, the national broadband network plan, the Fair Work Act and recent changes to the superannuation system were all examples of highly significant regulations that were made exempt from the rules that required governments to assess the red tape impact.

“Exemptions should be limited to genuinely exceptional circumstances, such as emergency situations, where a clear public interest can be demonstrated," the report said.

Opposition spokesman
Mathias Cormann
said the Australian Taxation Office revealed in October that taxpayers paid $60 million over three years to administer the mining tax and the petroleum resource rent tax. But it was still unclear how much the mining tax would deliver in revenue in its first year of operation because of declining resources profits.

“We are now in the ridiculous situation where the MRRT appears to be costing the budget and the economy more to administer and comply with than it is raising in revenue," he said.